BLOOMINGTON, Ind. — Indiana exports have reached a record high, but a report from the Indiana University Kelley School of Business predicts stagnate European economies and moderate activity in some emerging markets do not bode well for increases in 2012.
The report from Kelley’s Indiana Business Research Center shows exports totaled $32.2 billion in 2011, a record high for the state.
Tanya Hall, an economic research analyst at the IBRC and a co-author of the report, observed that Indiana has outperformed the nation in its exports’ annual rate of growth over the past 10 years, 8.1 percent versus 7.1 percent.
The global slowdown since 2008 has affected U.S. and Indiana exports, particularly in 2009, Hall wrote in the report, “Global Positioning: Indiana’s Exports in 2011.”
“U.S. export activity contracted 18 percent in 2009 before rebounding in 2010. Indiana, on the other hand, began to feel the effects of the recession in 2008, but suffered less contraction in 2009,” she said. “Indiana’s 2010 rebound was stronger than the nation and the Midwest, marking the strongest year-over-year growth in a single year since 2000. In 2011, however, Indiana’s increase in exports was not as strong as either the Midwest or the nation as a whole.”
Exports in Indiana rose 25.5 percent from 2009 to 2010 and 10.3 percent from 2010 to 2011. The state’s exports outpaced gross domestic product growth in almost every industry, except for machinery and computer and electronic products.
Looking at Indiana’s most popular export products, a familiar story remains. Vehicles and parts have persisted as the state’s top exporting industry and experienced sustained growth of 16.7 percent in the past year.
The report noted that a shift took place in 2011 concerning destinations for Indiana exports. From 2001 to 2011, it looked as if Canada and Mexico — two major markets for state goods that historically account for almost a half of all exports — might be eclipsed by trade with Germany, Spain and two BRIC nations, Brazil and China.
However, in 2011, increases in exports to these countries dropped to single digits, including 1.7 percent in the case of Spain, which had been growing by triple digits since 2000.
In 2011, Indiana exports to Canada and Mexico jumped by 10.2 percent or by $1.1 billion and 25.5 percent or $665 million, respectively.
“The strengthening rebound in the national auto sector, together with the softening of the European economies and the moderating growth of Brazil, Russia, India and China explain this shift in export trends,” the report said. “Given the strong economic headwinds currently experienced across the globe, the only bright spot on the export horizon is trade related to the auto sector with Indiana’s largest trading partners, Canada and Mexico.”
Exports to Latin American and Caribbean countries also were significant in 2011, accounting for 15.5 percent and totaling $5 billion of the state’s overall trade activity. Excluding Mexico, the region imported 5.3 percent of the state’s exports.
“While not close to Asia or Europe in significance currently, since 1997 Indiana has dramatically increased its exports to Latin American and Caribbean countries by a staggering 383 percent,” the report said. “As with other global regions, the Great Recession resulted in a dip in exports during 2009, but exports strongly rebounded in 2010 and 2011.”
Source: Indiana University Kelley School of Business